Price Waterhouse To Testify At Hearing On Proposed Withholding Tax Regs.

Chip K. Collins of Price Waterhouse LLP, Washington, has asked to present oral comments at the public hearing on the proposed withholding tax regulations. Collins will testify on the notional principal contracts, documentary evidence standard, qualified intermediary procedures, bank deposit interest, taxpayer identification requirement, late received Forms W-8, refunds and the filing deadline.

====== FULL TEXT ======

July 2, 1996

Internal Revenue Service

RE: Proposed regulations relating to withholding of tax on

Dear Sir or Madam:

[1] I respectfully request the opportunity to speak at the public hearing scheduled for July 24, 1996, on the proposed withholding regulations (INTL-0032-93, INTL-52-86). I will be speaking on behalf of Price Waterhouse LLP.

[2] I have attached a tentative outline of the issues to be discussed at the hearing. I will provide a more comprehensive discussion in our comment letter.

[3] If you have any questions, please call me at 414-1660.

Sincerely,

Chip K. Collins

* * *

OUTLINE OF TESTIMONY ON PROPOSED WITHHOLDING REGULATIONS

I. Notional principal contracts

The documentation standard for non-U.S. counterparties to NPCs should be clarified and should not be based on a Form W-8. In addition, the proposed Form 1042-S reporting requirement is too broad.

II. Documentary evidence standard

The proposed documentary evidence standard should be clarified and liberalized for both treaty and non-treaty payments. The proposed three-year renewal requirement should be dropped.

III. Qualified Intermediary procedures

Standardized withholding agreements (presumably on a country-by- country basis) should be made available publicly.

IV. Bank deposit interest

The proposal to require a Form W-8 from a foreign beneficial owner of bank deposit interest appears to exceed the IRS's statutory authority. Instead, bank deposit interest should be subject to the same documentation rules as 183-day OID and gross sales proceeds.

V. TIN requirement

The proposed TIN requirement for applying treaty rate withholding is too broad and would affect certain market-based transactions.

VI. Late-received Forms W-8

The regulations indicate that a late-received Form W-8 could not be used to relieve a withholding agent from a withholding liability if the relevant year is beyond the beneficial owner's period of limitation for claiming a refund. The limitation period should relate to the withholding agent, not the beneficial owner.

VII. Refunds

The documentation requirements for refunding NRA withholding should be clarified.

VIII. Filing deadline

Deadline for filing Form 1042 and 1042-S should remain March 15.